Rama Kanta Deb vs Bhagaban Ram Kairi and Others

S.K. Dutta, J.—These analogous appeals arise out of miscellaneous cases Nos. 11 and 16 of 1958 in the Court of the Subordinate Judge, Cachar. The facts are as follows:

The Appellant Rama Kanta Deb obtained a decree against Radhika Ranjan Das and his three brOrs. in Money Suit No. 23 of 1956 in the above Court in terms of a ''sulenama'' filed by the parties, The ''sulenama'' provided for payment of the decretal amount of Rs. 33,501/ - in various instalments. It was further provided that judgment debtor Radhika Ranjan Das and Ors. who were the owners of a Cinema house which was at that time on lease for 11 years to one Bhagaban Ram Karri, would not alienate the same till the satisfaction of the aforesaid decree. The decree was put into execution in Money Execution Case No. 9 of 1957 and the Cinema house with all its furniture and apparatus was attached subject to the above lease under Order 21 Rule 46 of the Code of Civil Procedure. It is against the sale of this property that the above miscellaneous cases were filed, one by Bhagaban Ram Kairi and the other by Radhika Ranjan Das. The contention of the Petitioners in both the cases was that the Cinema house was a partnership property of the judgment debtors namely Radhika Ranjan Das and his brOrs. and of Bhagaban Ram Kairi. It was submitted that the decree-holder could proceed against this property only under Sub-rule (2) of the Rule 49 of Order 21 of the Code of Civil Procedure.

The background of the contention was that the Cinema house was formerly the subject-matter of a partnership between ''Bhagaban Ram Kairi and judgment-debtors Radhika Ranjan Das and his brOrs. . Thereafter Bhagaban Ram Kairi instituted a suit for dissolution of partnership and for accounts being Title Suit No. 17 of 1951. This suit was disposed of on compromise which provided inter alia that Bhagaban Ram Kairi would give up all claims as a partner and the Cinema house would be treated as the sole property of judgment-debtors Radhika Ranjan Das and his brOrs. . It was agreed that the judgment-debtors would lease out the said concern to Bhagaban Ram Kairi on certain terms. Consequently a lease was executed and the ''sulenama'' was filed.

Sometime later Bhagaban Ram Kairi filed a suit being Title Suit No. 30 of 1956 for setting side the compromise decree on the allegation that it was obtained by fraud. Radhika Ranjan Das and his brOrs. contested the suit by filing a written statement. They also filed two cross-suits being Title Suit No. 32 of 1956 and Money-Suit No. 36 of 1956, the former for declaration of their sole title to the Cinema house and the latter for realisation of arrears of rent. When the suits were proceeding the present Appellant Rama Kanta Deb obtained a decree in Money Suit No. 23 of 1956 and started Money Execution Case No. 9 of 1057 in course of which the Cinema house was attached. After this attachment order was made, all the suits between Bhagaban Ram Kairi and Radhika Ranjan Das and his brOrs. were compromised in terms of an agreement executed between them. The agreement provided that Title Suits Nos. 32 and 36 of 1956 filed by Radhika Ranjan Das and his brOrs. would be dismissed and that Title Suit No. 30 of 1956 filed by Bhagaban Ram Kairi would stand decreed and the previous decree in Title Suit No. 17 of 1951 would be set aside and the lease executed by the parties in pursuance of that decree would be treated as null and void. It was further provided that the Cinema house would be regarded as a partnership property as before and the same would be placed at the hands of Radhika Ranjan Das and his brOrs. who would pay certain specific profits to Bhagaban Ram Kairi.

In the miscellaneous cases it was argued before the Subordinate Judge that the original relationship of partners between Bhagaban Ram Kairi and Radhika Ranjan Das and his brOrs. was revived and hence the Cinema house was not liable to be sold in execution of the decree obtained by Rama Kanta Deb in his Money Suit No. 23 of 1956. It was argued that Rama Kanta Deb was entitled to proceed only under Order 21 Rule 49 of the CPC as against partnership property. On the other hand it was contended on behalf of the decree-holder Rama Kanta Deb that the subsequent compromise by which the partnership was revived was hit by the provisions of Section 64 of the Code of Civil Procedure, and was therefore void. The learned Subordinate Judge held that the Cinema house and its properties were subject-matter of a partnership and could not be put to sale. He accordingly allowed the miscellaneous cases and the present appeals are against this order.

The same points which were raised before the Subordinate Judge are again raised before us. It is argued that when a decree was passed in terms of a compromise which provided that the lease would be regarded as void and that the partnership would be revived, there was transfer of some ownership interest in the Cinema house and its properties to Bhagaban Ram Kairi and as such Section 64 of the CPC would be attracted. Mr. Dam, appearing on behalf of the Respondents submits that there was no transfer and that even if there was a transfer the said transfer could not be regarded as a private transfer as contemplated in the above section.

From the facts of the case laid down above, the sequence of events becomes clear. First, Radhika Ranjan Das and his brOrs. on the one hand and Bhagaban Ram Kairi on the other were partners of the Cinema house. Later in view of the compromise decree in Title Suit No. 17 of 1951 Radhika Ranjan Das and his brOrs. became the sole owners of the said property and Bhagaban Ram Kairi became a lessee of the same. In his deposition Radhika Ranjan Das said that Bhagaban Ram Kairi paid rent in terms of the lease for about two years and became a defaulter thereafter. He further said that at the time of attachment of the property Bhagaban Ram Kairi was in possession as a lessee and they were the lessors. From this it is quite clear that when Bhagaban Ram Kairi and Radhika Ranjan Das and his brOrs. again became partners there was transfer of some ownership interest in the property to Bhaga ban Ram Kairi. The next question is whether this transfer was a private one. It may be noted that a decree was passed reviving the partnership in terms of a compromise arrived at by the parties and the law seems to be well settled that a decree passed by a Court with the consent of the parties recognising a transfer constitutes a private transfer. Thus it was held by a Division Bench of the Madras High Court in The Imperial Bank of India Vs. Balasubramania Pandia Tevar and Others, that the orders of the Court passed with the consent of the parties had no higher sanction than that of a mere private transfer. This case was considered by the learned Subordinate Judge who disposed it of as inapplicable to the present case on the ground that a certain payment referred to in that case was not made in pursuance of any compromise decree but in pursuance of an interlocutory order passed by the Court with the consent of the parties. The learned Subordinate Judge, however, lost sight of the fact that this interlocutory order was also incorporated in certain decrees passed by the High Court in various appeals. In Maung Po Lu v. Bank of Chettinad AIR 1934 Rang 313 it was held that where the form which the decree took was entirely dependant on the agreement of the parties and it was by private agreement between them that particular properties were transferred to one of them, the transfer was definitely a private transfer, although it was embodied in the decree of the Court. The meaning of the term "private transfer" was also discussed by a Division Bench of the Bombay High Court in Damodar Sukram Marwadi Vs. Kashinath Bhikaji Zende, and it was observed that the meaning of "private transfer" in Section 64 of the Civil Procedure Coda was a transfer which was brought about solely by the act of parties and not as a result of any judicial decision. A device to invest a private arrangement between the parties with the appearance of a public adjudication was in itself a collusive, though not necessarily a fraudulent, transaction. If in reality there had been a transfer by the private act of the parties, it did not cease to be a private transfer by being given the appearance of a public adjudication. In Golab Khan v. Bholanath Marick 12 Cal LJ 545 a person obtained an attachment of the compensation money, in so far as it represented the interest of his judgment-debtor, before a reference was made and during the pendency of the proceedings in the Civil Court. Then the judgment debtor put in a petition by which he abandoned his claim to the compensation. It was held by a Division Bench of the Calcutta High Court that the effect of the compromise was to transfer the interest which the judgment-debtor possessed to the other claimants and such a transfer was contrary to the provisions of Section 64 of the Code of Civil Procedure.

In the above view of the matter, in the present case, an effect of the compromise was the transfer of a share in the proprietary interest in the Cinema house to Bhagaban Ram Kairi and this transfer was by private arrangement. Mr. Dam, however, has relied on the decisions in the following cases in his contention that the transfer, if any, in the present case was not a private transfer; namely Saburdas Mahasukhram Gandhi Vs. Gopalji Nandas Patel, Mohammad Afzal Khan v. Abdul Rahman AIR 1932 PC 235; P.S. Narayana Aiyar Vs. Biyari Bivi alias Kathun Bivi and Others, In all these cases the law laid down is that if a transfer takes place according to a decree which embodies an award in arbitration, the said transfer is not a private transfer even if the award is made without the intervention of the Court. But this rule of law is not applicable to our case. In the instant case the decree was based on a private compromise and not on an award. When a decree embodies an award which allows the transfer, the position is different. There the decree is not the result of any private compromise but only the arbitration is initiated by such a compromise. When an award is made by arbitrators after adjudication, it cannot be said that such an award is a private compromise unless the reference to arbitrators is a collusive one. When parties agree to make a reference to arbitrators, they simply choose a particular type of tribunal and they are bound by the award of that tribunal. Hence a transfer directed in an award of the Tribunal is nothing but an enforced transfer as distinct from a private transfer. Moreover, in the present case, the judgment-debtors made a compromise with Bhagaban Kairi after the Cinema house was attached and this smacks of collusion.

Mr. Ghose lastly points out that the learned Subordinate Judge should not have struck off the execution case even if the Cinema house was a partnership property. Clause (2) of Rule 47 of Order 21 of the CPC provides that the Court can pass an order charging the interest of a judgment-debtor in a partnership property and profits with payment of the amount due and appoint a receiver for the same. The learned Subordinate Judge should have taken action under this clause. But we have already held that the transfer of the Cinema house together with its furniture and apparatus was void u/s 64 of the Code of Civil Procedure. Hence the appeals are allowed and the order of the Subordinate Judge is set aside Execution will proceed against the above property. There will be no order as to cost. No orders need be passed in the Revision petition in view of the above judgment.

Mehrotra, C.J.

I have had fee advantage of reading the judgment of my brother Dutta, J. and I agree with his conclusions and the proposed order. I would however, like to add my own reasons.

The compromise in the suits by which Bhagawan Ram Kairi and the judgment-debtors agreed to enter into a partnership on the same terms on which they were partners before, amounts to a private transfer of the share of the judgment-debtors to Bhagawan Ram Kairi. Even though the partnership was on the same terms as the earlier partnership, it does not mean that the partnership continued as before and there was no break in the partnership at any stage. The compromise thus is hit by Section 64 of the Code of Civil Procedure. The application for the execution was made on the 2nd April 1957 and the execution was sought by attachment of the following properties:

(1) Homestead land measuring 2 P. 6 G. under the title of the J.D. situated towards the South of the Homestead land of Chintapatm in ward No. 2 of Karimganj Municipality pertaining to Decennial Mohal, Pargana Kusiarkul, Mauza Banamali, Taluk No. 15025/338, Fazil mang in the District of Cachar, bounded by Road on the East and South and by drain of the Public Works Department Road on the West and by lands of Khan Bahadur Maulavi Abdul Mazid Choudhuri and Ors. and boundary line of Chintapatni''s house on the North.

(2) One Cinema House with Corrugated Iron Sheets roofing, pucca plinth and two small tin houses along with pit Engine, Machinery and all other necessary articles and furniture of the Cinema houses worth about Rs. 15,000 situated on the said land in Holding No. 397, Ward No. 2 of Karimganj Municipality.

On the 7th May 1957, an objection was filed by Sri Bhagaban Ram Kairi under Order 21, Rule 58, CPC by which it was prayed that the order of attachment be withdrawn or that the attachment should be made subject to the charge of the Petitioner claimed under the deed of partnership. The case of Bhagawan Ram Kairi was that the lease was void as it was obtained (by fraud and misrepresentation of facts and that the partnership still continued. Prohibitory order was issued under Order 21, Rule 54 on the 10th May 1957, restraining the judgment-debtors from disposing of the properties. By an order dated the 20th July 1957 the objection filed by Bhagawan Ram Kairi was rejected by the Subordinate Judge. He held that as the allegation about partnership is dependent upon the success of the suit which had been filed by the objector for a declaration that the lease was void ab initio, the Petitioner was at the time of filing objection in possession of the attached property as a lessee. That being so the property was liable to be attached subject to the lease.

On the 23rd August 1957 the judgment-debtor also filed an objection that the execution case was not maintainable and that the petition filed by him should be treated as one under Order 21, Rule 2 and Section 47, Code of Civil Procedure. After the compromise Bhagawan Ram Kairi filed an application on the 7th March 1958, purporting to be one u/s 47 and Order 21, Rule 49, Code of Civil Procedure. It was prayed that as the matter has been compromised and the Property is a partnership property, the order of attachment should be withdrawn and the decree-holder be directed to proceed according to law under Order 21, Rule 49. On the 8th April 1958 an application was also filed by the judgment-debtor purporting to be u/s 47, CPC praying that in view of the compromise by which the property was treated to be a partnership between the judgment-debtors and Bhagawan Ram Kairi the execution could not proceed. It is on these two applications that the two miscellaneous proceedings were started and have been disposed of by the order under appeal.

Apart from the finding that the compromise is hit by Section 64, CPC the applications to my mind appear to be only misconceived. Order 21, Rule 46 and Order 21 Rule 49 deal with the mode of attachment only, Order 21 Rule 49(1) only lays down that:

Save as otherwise provided by this rule, property belonging to a partnership shall not be attached or sold in execution of a decree other than a decree passed against the firm or against the partners in the firm as such.

Thereafter the procedure is laid down as to how the share of the partners can be attached. The property in question was attached by the decree-holder as solely belonging to the judgment-debtor. After the attachment was made prohibitory ardor was issued under Order 21, Rule 54, Code of Civil Procedure. Thereafter right is given to those who are not parties to the suit to file objection under Order 21 Rule 58, Code of Civil Procedure. In an application under Order 21, Rule 58 it is open to the objector to lay claim to the property and to object to the attachment of any property. If the judgment debtor also wishes to object that the property is not liable to attachment as he is in possession as a partner and not in his sole right, it is a claim by him as a third party and such a claim will also be covered by Order 21, Rule 58, Code of Civil Procedure. The claim or the objection filed under Order 21, Rule 58 is then investigated and the order passed under Order 21 Rule 61 is final subject only to a suit within a year under Order 21 Rule 63. The objection filed by Bhagawan Ram Kairi under Order 21 Rule 58 was rejected and no suit was filed within one year from that date with the result that the order became final. Any claim of Bhagawan Ram Kairi therefore, that the effect of the ''sulenama'' in the subsequent suits is to revive the old state of a partnership and that the partnership continued throughout without any break, cannot now be maintained. The objector Bhagawan Ram Kairi has therefore to concede that he got a fresh cause of action for applying on the ground that under the compromise subsequently arrived at he acquired the status of a partner. If this position is accepted the subsequent compromise will on his own showing, be hit by Section 64 of the Code of Civil Procedure.

As to the claim of the judgment-debtor purporting to be one u/s 47, CPC the answer is that the matter now raised does not relate to execution, discharge or satisfaction of the decree. The present claim of the judgment-debtor is that he has all along been in possession of the property as a partner and thus the property was not unable to be attached. This objection could only be filed under Order 21, Rule 58, CPC and if the stand taken by the judgment-debtor was to the effect that the property by a subsequent compromise has become a partnership property, the compromise is hit by Section 64, Code of Civil Procedure. In any view of the matter therefore, the objections were misconceived and should leave been rejected.